Workers may see bigger bonuses this year, but base pay is moving more slowly.
A survey from Korn Ferry, covering more than 4,250 organizations across 133 countries, shows companies are leaning on variable pay while keeping fixed salaries in check.
Companies Favor Bonuses Over Raises
About 72% of organizations expect to pay bonuses at or above target in 2026. At the same time, salary increases are becoming more selective.
Most companies still plan to raise pay for a majority of employees, but fewer workers are receiving increases compared to last year. Only 35% of organizations expect to give raises to nearly all employees, signaling tighter control over compensation.
In the U.S., median salary increases are modest, around 3% for employees and senior leaders, with slightly higher growth for middle managers.
Fixed Costs Under Pressure
The slower pace of salary growth reflects a cautious approach to long-term costs. Instead of locking in higher base pay, companies are using bonuses and incentives to stay flexible while still rewarding performance.
This approach allows employers to adjust compensation more easily as economic conditions change.
AI Talent Is Altering Pay
At the same time, demand for AI-related skills is starting to break traditional pay structures.
Organizations are offering premiums of 10% to 15% above comparable roles to attract specialized talent. Sign-on bonuses and retention incentives are also becoming more common for workers with AI expertise.
A More Targeted Approach to Pay
The result is a more uneven compensation picture. Broad, across-the-board raises are giving way to targeted increases and performance-based rewards.
As companies balance cost control with the need to compete for high-demand skills, pay strategies are becoming more flexibleโand more selective.
